JPMorgan analysts have highlighted that the near-term direction of bitcoin’s price hinges more on the resilience of Strategy (formerly MicroStrategy) than on miner activity.

Despite ongoing sell pressure from some miners, Strategy’s strong balance sheet remains the key focus for market watchers.

Production cost and miner pressure

According to JPMorgan, bitcoin’s recent price weakness is driven by a combination of declining network hashrate and mining difficulty, as well as developments surrounding Strategy.

The analysts, led by Nikolaos Panigirtzoglou, estimate the current production cost for bitcoin is around $90,000, down from $94,000 last month, assuming electricity at $0.05/kWh.

For every $0.01/kWh increase, production cost rises by $18,000 for higher-cost miners, intensifying sell pressure.

Strategy’s financial health in focus

Strategy’s enterprise-value-to-bitcoin-holdings ratio stands at 1.13, which JPMorgan sees as encouraging, indicating the company is unlikely to sell bitcoin to meet obligations.

The analysts noted:

“If this ratio stays above 1.0 and MicroStrategy can eventually avoid selling bitcoins, markets will likely be reassured and the worst for bitcoin prices will likely be behind us.”

Additionally, Strategy’s $1.44 billion U.S. dollar reserve could cover up to two years of dividend and interest payments, further reducing the risk of a forced bitcoin sale.

MSCI index risk already priced in

JPMorgan also addressed the potential removal of Strategy from MSCI equity indices, saying the downside is likely limited since the risk is “already more than priced in.”

Since MSCI’s consultation began in October, Strategy’s share price has dropped by 40%, underperforming bitcoin by 20%.

If MSCI retains Strategy, both the company and bitcoin could rebound toward pre-October levels. The analysts reiterated their long-term theoretical price target for bitcoin at $170,000, based on a volatility-adjusted comparison to gold.